Next blow for Tinkler as Maules Creek delayed

The federal government has deferred a decision on Whitehaven Coal’s controversial Maules Creek mine in the NSW Gunnedah Basin, until the end of April.

The proposed open cut mine, one of three coal projects within the Leard State Forest, was approved after a two year process by the NSW Government last August but awaits federal approval under the Environment Protection and Biodiversity Conservation Act. A decision on expansion of its adjacent Boggabri mine, a joint venture with Japan’s Idemitsu, was also deferred.

A statement on the reasons for the deferral is expected shortly.

Maules Creek is a key growth project for Whitehaven, whose shares dropped nearly 6 per cent to close at $3.02.

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"We are extremely disappointed at this further delay to this important project,” said Whitehaven’s managing director Tony Haggarty.

‘‘We have spent many months working with [the federal environment department] and Minister Burke's office to promptly and thoroughly address any questions they have had in relation to the project, as well as providing full details of the benefits to the region,” Mr Haggarty said.

“Whitehaven is not aware of any substantive issues with the environmental evaluations or process which has been followed,” he said.

The Maules Creek project assumed national significance in January when Front Line Action on Coal activist Jonathan Moylan, who was camped in the Leard forest in protest, issued a fake press release from ANZ purporting to withdraw finance from the project.

Mr Moylan’s hoax temporarily wiped $314 million from the market capitalisation of Whitehaven and he is now under investigation by the Australian Securities and Investments Commission, and could face jail.

Shares in Whitehaven have now fallen 14 per cent this year, after a substantial earnings downgrade for 2012-13. It has now wiped off much of the gains it achieved when speculation arose that Chinese miner Shenhua could be interested in mounting a takeover bid for the company, or could acquire the 19.4 per cent stake held by the largest shareholder Nathan Tinkler.

At today’s prices Mr Tinkler’s stake is worth $598 million. As Fairfax Media reported last December, Mr Tinkler is believed to have total debts to hedge fund Farallon Capital, including principal and interest, of about $700 million.

A statement from the federal environment department said the decision on both projects was deferred to "seek clarification on potential impacts to matters of national environmental significance".

"Given that the Maules Creek and Boggabri projects are proposed to be located very close together, it is appropriate that their respective impacts are assessed in parallel, to look at their cumulative impacts as a whole, and to ensure they deliver long-term environmental sustainability for the region," the statement said.

PhillipsCapital analyst Lawrence Grech said the deferral was "disappointing" and it was unclear whether the hold-up was for "substantive reasons that may threaten approval or whether it is merely procedural issues".

"While we hope that the government is not just reacting to protests over the methodical and inclusive approvals process encompassing multiple stakeholders – it may be that investment certainty may be enhanced with a change of federal government after the September 2013 elections," Mr Grech said.